The three-alarm fire broke out around 4 a.m. Thursday at a home on the 1300 block of Tatum Street in West Deptford.
Arriving crews saw the house fully engulfed in flames and said the fire had spread to a neighboring home.
The intensity of the fire resulted in both homes collapsing.
VIDEO: Action Cam on scene of West Deptford fire
There were reports of people trapped before firefighters arrived.
Authorities said four residents of the first home, as well as three people in the second home, were able to escape the fire.
Those that were able to escape from the first home told authorities at the scene that one of their family members was still missing.
The West Deptford Police Department said, "Despite efforts to locate and extract that individual, a 54-year-old female, she ultimately succumbed to the heavy smoke and fire."
Police said the victim's family members who did make it out of the home - a 57-year-old man, a 26-year-old man, a 31-year-old woman and a 1-month-old boy - were treated at the scene by EMS. They were then taken to Cooper University Hospital in Camden for further evaluation.
The 57-year-old man was later airlifted to Crozer Chester Medical Center for additional treatment.
Many neighbors told Action News the residents were made up of a couple, their adult grandson, a woman and the infant.
"I'm shaking like crazy. I'm still in shock. I really want to know what happened to the grandson and the great-grandbaby. We just don't know anything yet. Hoping we find out something soon," neighbor Tonya Kampmeier said.
Neighbors said the family had recently moved into the home. Records show the home was sold in September 2021. Neighbors said the former homeowners renovated the home before selling it to the family.
The owner of the second home told Action News everyone in her house was accounted for and is OK.
A third home sustained minimal exterior damage.
Neighbors came out onto the street to watch the firefighters battle the raging flames and to see if everyone made it out.
"I just feel bad for them. You work all your life and now it's gone. It's just gone. It's unbelievable. I can't believe that happened to them," neighbor Tom Dougherty said.
Crews remained on the scene for hours spraying down hot spots.
The cause of the fire is under investigation by the Office of the Gloucester County Fire Marshal.